How can foreign investors legally contribute capital to a Vietnamese company? What approvals, documents, and compliance steps are required under Vietnamese law? This comprehensive guide explains the step-by-step procedures, legal conditions, and strategic considerations foreign investors must understand before contributing capital in Vietnam—based on up-to-date regulations and practical experience advising global clients.
Vietnam’s fast-growing economy continues to attract foreign investors seeking opportunities in trading, technology, advertising, manufacturing, logistics, and digital services. One of the most common market entry methods is contributing capital to an existing Vietnamese company. However, under the Law on Investment 2020, any capital contribution by a foreign investor is considered a foreign investment activity—and therefore subject to specific regulatory procedures.
Unlike Vietnamese investors, foreign investors cannot freely acquire shares or ownership without government review. Vietnam requires foreign individuals and foreign organizations to follow approval procedures depending on the business sector, investment structure, and strategic significance of the target company.
Vietnamese law recognizes several forms of capital contribution by foreign investors, including:
Purchasing capital contributions in a limited liability company
Purchasing shares in a joint-stock company
Contributing additional capital to increase the company’s charter capital
Receiving capital contribution from another member and becoming a new owner
Any of these transactions triggers foreign investor procedures, even if the contribution is small.
Foreign investors must apply for Capital Contribution Approval (also called M&A Approval) when the investment falls under any of the following conditions:
The target company operates in a conditional business line for foreign investors
The capital contribution results in foreign ownership exceeding 50% in the company
The investment involves industries affecting national security
The Vietnamese company holds or uses land in sensitive locations such as border areas or coastal regions
The investment structure changes control or management rights within regulated industries
Common conditional sectors include advertising, education, tourism, logistics, telecommunications, and e-commerce—where foreign ownership may be limited or subject to strict review.
If none of the above applies, the investor may contribute capital without requiring prior approval, but still must complete post-transaction procedures.
Below is the complete process that foreign investors must follow from evaluation to legal recognition.
Before initiating any capital transaction, foreign investors should determine:
Whether the target company operates in a restricted or conditional sector
Whether the transaction will cause foreign ownership to exceed regulatory thresholds
Whether the company holds land in sensitive areas
Whether special licensing or industry rules apply
This assessment guides whether approval is required and how to structure the investment.
DEDICA Law routinely assists investors with pre-transaction reviews to avoid legal risks.
If approval is required, the investor must submit an application to the Department of Planning and Investment (DPI) where the Vietnamese company is located.
Documents typically include:
Investor passport (individual) or business license and charter (organization)
Legalized and translated foreign documents (mandatory for all foreign papers)
Financial proof of investment capacity
Capital purchase contract or agreement
Charter and registration documents of the Vietnamese company
Explanation of compliance with foreign ownership rules
The DPI reviews:
Legality of the business sector
Ownership ratios
National security concerns
Compliance with WTO commitments and local investment laws
Processing time is generally 15–20 working days, but may be extended for conditional industries.
Once approval is granted, the Vietnamese company must update its Enterprise Registration Certificate (ERC) to reflect:
The new foreign investor
Updated ownership structure
Revised charter capital (if increased)
Any related amendments to the company charter
This step formally recognizes the foreign investor as a legal owner.
Without amending the ERC, the investment is not legally effective, even if money has been transferred.
Foreign investors must transfer investment funds through a Direct Investment Capital Account, which the Vietnamese company must open at a licensed commercial bank.
The DICA serves as the mandatory channel for:
Receiving capital contributions
Transferring profits abroad
Documenting changes in capital structure
Ensuring compliance with foreign exchange regulations
Foreign investors cannot legally transfer funds directly to a company’s operating account.
The investor transfers the approved capital amount from overseas into the DICA. The bank verifies:
Source of funds
Consistency with the approved documents
Compliance with anti-money laundering regulations
Proper currency conversion
The transfer must match:
The amount stated in the approval
The timeline stated in the approval
The ownership ratio reflected in the ERC
Late or incorrect capital contributions can lead to penalties or forced amendments.
After capital is contributed and legally recorded, the company must:
Update internal ownership registers
Report completion of capital contribution to DPI
Adjust tax and accounting records
Revise corporate governance documents if needed
Notify relevant authorities for sector-specific compliance
Certain industries require additional licensing or reporting after foreign ownership changes.
Even though capital contribution appears straightforward, several risks and complexities can arise.
Industries such as:
Advertising
Education
Travel services
Logistics
Trading and distribution
Media and entertainment
may require foreign investors to structure contributions carefully. Some sectors allow majority ownership; others restrict foreign participation or require joint-venture structures.
Foreign investors must check both WTO commitments and local regulations, which may differ.
Vietnam imposes restrictions on foreign ownership in companies located in or holding land use rights in:
Border regions
Coastal economic zones
Areas near military facilities
Industrial zones with strategic significance
If the Vietnamese company operates in such areas, the capital contribution may require an extended review or may be disallowed entirely.
All foreign documents must be:
Notarized
Consular legalized
Translated into Vietnamese
Notarized in Vietnam
Incorrect legalization is one of the most common reasons for application delays.
If the foreign investor contributes capital without completing required procedures, risks include:
Capital contribution declared invalid
Inability to repatriate profits
Administrative fines
Forced reversal of ownership
Tax complications
Barriers to future investment licensing
Proper compliance ensures the investor’s rights are legally protected.
DEDICA Law provides comprehensive support throughout the entire investment process, ensuring compliance, efficiency, and strategic structuring.
Determining whether approval is required
Reviewing foreign ownership restrictions in the target sector
Preparing capital contribution approval dossiers
Legalizing foreign documents correctly
Drafting contracts and shareholder agreements
Amending the Enterprise Registration Certificate
Supporting DICA bank procedures
Advising on post-investment obligations
DEDICA's team includes lawyers with international backgrounds, allowing us to provide global-standard legal service tailored to Vietnam’s complex regulatory environment.
Strong expertise in foreign investment and corporate law
Deep understanding of conditional industries and foreign ownership caps
Proven experience with multinational investors
Transparent processes and predictable timelines
Practical, business-oriented legal solutions
DEDICA Law ensures each investment is compliant, secure, and strategically structured.
Foreign investment through capital contribution is an excellent way for foreign investors to participate in Vietnam’s fast-growing market. However, the process requires correct approvals, structured documentation, legal compliance, and proper capital transfer procedures.
With the right legal guidance, foreign investors can complete the process smoothly and enjoy full legal protection of their investment rights.
Are you planning to contribute capital to a Vietnamese company?
Contact DEDICA Law for expert legal support throughout every stage of your investment journey.
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, Zalo)
🕒 Working Hours: Monday – Friday (8:30 – 18:00)
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